Impacts of Hydraulic Fracturing and Completion Decisions on Shale Gas Well Productivity

34 Pages Posted: 16 Oct 2012

See all articles by Janie M. Chermak

Janie M. Chermak

University of New Mexico - Department of Economics

James Crafton

Performance Sciences, Inc.

Robert H. Patrick

Rutgers University

Date Written: October 16, 2012

Abstract

We develop a model for optimal discrete periodic capital investment and dynamic production of shale gas wells and econometrically estimate early period cumulative production functions for vertical and horizontal well technologies. Results indicate reservoir and completion outcomes have significant impacts that are consistent in sign across the two technologies, but the magnitudes and probabilities of these impacts vary, sometimes substantially so. The impact of completion decisions on cumulative production is highly variable, with differences in early period production declines across the two well technologies. These results may, in part, explain the downward trend in reserve estimates for shale gas, as there is uncertainty in the impact of completion choices early period production.

Keywords: Shale gas, technology, production function

JEL Classification: Q4, Q41, Q49, Y80

Suggested Citation

Chermak, Janie M. and Crafton, James and Patrick, Robert H., Impacts of Hydraulic Fracturing and Completion Decisions on Shale Gas Well Productivity (October 16, 2012). Available at SSRN: https://ssrn.com/abstract=2162486 or http://dx.doi.org/10.2139/ssrn.2162486

Janie M. Chermak (Contact Author)

University of New Mexico - Department of Economics ( email )

1915 Roma NE/Economics Building
Albuquerque, NM 87131
United States

James Crafton

Performance Sciences, Inc. ( email )

PO Box 190
Evergreen, CO 80437
United States
303-445-9062 (Phone)

Robert H. Patrick

Rutgers University ( email )

Rutgers Business School - Newark and New Brunswick
Department of Finance and Economics
Newark, NJ 07102
United States
(973) 353-5247 (Phone)

HOME PAGE: http://www.rci.rutgers.edu/~rpatrick/hp.html

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